The corporate income tax is a jobs program

The Biden Administration’s “American Jobs Plan” is aptly named. Obviously, spending on infrastructure and other things will provoke activity that contributes to employment. But less widely understood is that the “pay for” part is also employment supportive, perhaps more importantly and durably than the expenditure side. The proposal would increase the corporate tax rate from 21% to 28%. That’s good, but not enough. It would be better for employment if the corporate tax rate would be reset to the pre-Obama 35% rate, and better yet if it were set to the 50%-ish rates that prevailed during the worker-friendly 1950s. In addition to the top-line rate increase, the plan includes provisions to counter jurisdiction shopping and close loopholes in the corporate tax system. To the degree these reforms increase effective corporate tax rates, they too are employment supportive.

The reason is obvious. Wages and benefits (including employer-side payroll taxes) are tax-deductible expenses. When the corporate tax rate is just 21%, the opportunity cost to shareholders of every dollar spent on all-in compensation is 79¢. Only 21¢ gets covered by the tax writeoff. When the corporate tax rate is 50%, 50¢ out of every dollar spent on worker compensation comes out of Uncle Sam’s pockets, rather than out of shareholders’. Hiring workers is a much better deal for firms when the corporate tax rate is high than it is when corporate tax rates are low. For the same reason raising income tax rates would be a boon for tax-exempt nonprofits, increasing corporate tax rates is a boon for labor.

The counters to this are rote, and wrong. “High corporate tax rates reduce job creators’ incentive to build and grow businesses, swamping any benefit from reduced wage costs.” That might be plausible in a world that is not this one. In this world, there is little evidence that variations in the corporate tax rate much affect aggregate economic activity one way or another. In the US postwar experience, the higher corporate tax decades were the highest growth decades. And that might be causal, given the lower opportunity cost, and so effective stimulus, of wages and other business expenditures. It might also just be coincidence. But the supply-side claim that low corporate and income taxes would turbocharge investment and entrepreneurship has been tested over decades, and only really motivated squinting can scry the merest hint of it. There is little evidence for even the more plausible claim that jurisdictional differences between tax rates shape the location of real activity (as opposed to the location where profits are incorporeally booked).

This shouldn’t be surprising. The rewards to active entrepreneurship can be immunized from the effect of high corporate tax rates, because entrepreneurs earn salaries, which are deducted from profits. It is passive shareholding that is inescapably penalized by a higher profits tax, but given the concentration of shareholding among the very wealthiest, and the fact that these shares are now worth a greater fraction of the economy than ever before, balancing the distribution of wealth away from this group would be a good rather than bad thing. Smaller businesses are often “pass-thrus” — S corporations or LLCs in the United States — limiting any impact of the corporate tax on startups and local entrepreneurs.

From a neoclassical corporate finance perspective, every investment that is profitable at a low corporate tax rate is profitable at a higher corporate tax rates. Under certainty, a profits tax shouldn’t affect business investment decisions at all. Under uncertainty, the IRR of projects declines with a higher rate, but the riskiness of projects (and so the hurdle rates imposed) decline as well, since the state absorbs the impact of losses as well taxing gains. Any effect is likely to be ambiguous and small, and overwhelmed by the effect of macro policy on risk appetites and hurdle rates.

But once we pierce the veil of abstraction that surrounds the neoclassical firm, we see very clearly that a high profits tax creates incentives among firm stakeholders to distribute the pretax surplus in ways that don’t flow through to accounting profits. In the United States, research and development is treated as an expense even though it creates valuable intangible assets. Under a high corporate profits tax that can’t be circumvented, firms are more likely to behave as Amazon has, laundering its profits into R&D projects to avoid the squeeze. Research and development contributes to hiring and growth, much more than the same dollars distributed into the pockets of wealth shareholders ever would.

Similarly, a content, well-organized, loyal workforce is an asset to a firm. For any given corporate tax rate, a rational firm will “overpay” workers (relative to the lowest wages that would fill their vacancies) as long as the value captured from an additional dollar in “efficiency wages” is greater than (1-t), where t is the tax rate. It’s the same math as before. With a 21% tax rate, the firm will pay efficiency wages until it captures back less than 79¢ of value it sends to workers. With a 50% tax rate, the firm will be rationally more generous, paying workers until it captures back less than 50¢ of each dollar as “organizational capital“. Firms’ selfish generosity can take the form of higher payments to its existing workforce, amenities or upgrades to working conditions that engender employee loyalty and morale, or new hiring to lighten the load and improve output quality.

Incentives to expand R&D or pay workers are prosocial “distortions” of the corporate tax. But there are less lovely ways firm stakeholders might try to prevent the pretax surplus from flowing into profits. Most garishly, the corporate income tax already encourages firms finance themselves with debt, rather than equity. Interest payments are deductible, so debt investors get paid like workers, from pretax income rather than taxed profits. That’s terrible, and a destructive subsidy to the banking industry. Leveraged capital structures create financial fragility, exposing firm stakeholders and the rest of us to risks of unpredictable losses and financial crisis. It has always been time to end the tax deductibility of interest payments. Raising the level of the corporate income tax would be a great occasion to close the very antisocial tax loophole created by deductible interest payments.

The American Jobs Plan proposes

to fix the corporate tax code so that it incentivizes job creation and investment here in the United States, stops unfair and wasteful profit shifting to tax havens, and ensures that large corporations are paying their fair share… these corporate tax changes will raise over $2 trillion over the next 15 years and more than pay for the mostly one-time investments in the American Jobs Plan and then reduce deficits on a permanent basis

I don’t know whether that revenue number will materialize, whether it accounts for the fact that accounting profits are likely to decline even as activity expands if the plan succeeds at raising effective tax rates. Raising and tightening enforcement of the corporate tax is a good idea regardless. It will redirect wealth, away from shareholders, to some mix of the state and other firm stakeholders including customers and suppliers and especially workers. CEOs are better people when the tax system constructs firm dollars not as shareholder dollars, but as resources of a range of competing claimants. We don’t tax because it is a bad thing that we have to endure in order to pay for stuff. We tax because it is a good thing that promotes a broad prosperity and helps reconcile generous provision of public goods with stable prices. (I like the @jdcmedlock term “tax positivity“.) Raising the corporate income tax, ideally back to 50%, and ensuring the rate is actually effective with respect to earnings attributable to shareholders, would support all of these goals. It’s a great tax.

Writing as a public good

The newsletter platform Substack has grown controversial. For an overview of the controversy, see Ben Smith. To get in the trenches, read Nathan Tankus’ impassioned letter about why he’s leaving the platform.

I am mostly aloof to the Substack wars. I love trans people. I also love, read, and learn from people that some trans advocates accuse of being hateful. The humans are complicated. Love them. I have little sympathy for the big names who’ve made careers of being “canceled”. But I worry that the growth of media that blur personal and political spheres is reshaping offline norms in ways more likely to impoverish our private lives than enact useful change. These media include Twitter feeds and old-school blogs. But Substack newsletters, because of the incentives and ultimately influence that come with monetization, raise the stakes. This is most clear in the authors whom the platform woos with advances under “Substack Pro“. Substack may ostentatiously recruit trans activists to “balance” complaints that they’ve become a refuge for bigots, but arguably their and their authors’ pecuniary interest is in a lively culture war, hot on both sides, rather than in forms of deliberation that might be more constructive but less exhilarating.

As a person who likes to write but who thinks professionalization corrupts public affairs writing, these are issues I give some thought to. Jeet Heer makes a good point when he tweets “Writing is either a career or it’s an aristocratic hobby. If it’s an aristocratic hobby, it’s closed to most people.” At the same time, when writing becomes a career, the institutions and incentives beneath that career cannot help but shape the writing.

It would be good if we could finance careers in public affairs writing while largely insulating authors from financial and career incentives. Substack’s subscription model may (or may not) prove an improvement on the listicle-inspiring ad model. But the direct pecuniary stake in subscribership it provides (and gamifies) will color what authors write. People are willing to fund their clique’s warriors, so offering political “red meat” is an obvious strategy to win subscribers. As Glenn Greenwald puts it, “They’re not paying because they’re getting something in return; they’re paying because they want to support journalism that they think…needs to be heard.” Functionally Substack shares a perhaps uncomfortable kinship with ActBlue or WinRed. A subscription-based model is going to encourage writers to to flatter the interests of especially more affluent readers. Substack subscriptions are expensive compared to paywalled conventional journalism, on almost any quantitative measure of writing unlocked. Finally, in my view, public affairs writing ought to be a public good, where authors contribute to a universally accessible, intertextual commons, rather than marketing paywalled silos. It’s not writers’ responsibility to bear the weight of this ought. We need to find ways to finance the people who cultivate the commons. But it is a commons that we want, rather than a labyrinth of paywalls or (worse) a few dominant publications everyone has to subscribe to.

In writing as in many other domains, I think “high-powered incentives” — extrinsic money rather than intrinsic goods like pride in virtue or quality — are essential at low levels but destructive at high levels. We expect and want baristas and warehouse workers to be primarily in it for the money, although of course they take pride in the quality of their work too. The tax and shareholder-value revolutions of the 1960s through 1980s destroyed American society by turning the people near the top of our social hierarchies into rapacious maximizers, and we should undo that, quickly. In writing and in general, external incentivizers can easily distinguish outright incompetence from a basic capacity to do the work. Above a certain level, however, quality is difficult to observe. Incentivizing putative correlates of quality encourages gaming, with a net effect that is ambiguous at best. At high levels, people’s “skin in the game” should increasingly become attached to broad, cooperative outcomes rather than narrow measures of behavior.

In light of all this, one way the Substack model might be improved is with caps and refunds. As with Substack now, there would be paywalled content, but the paywall would be stochastic. When a browser hits a piece, if it’s an identifiable subscriber it’s allowed through. If not, a quiet lottery decides yay or nay. The odds of denial would go down as the number of subscribers go up. At very low subscriberships, this would effectively be the current model, a hard paywall. At very high subscriberships, all content would effectively be open.

On its own, this would be a prescription for free-riding and death spirals. Why pay expensively to “subscribe” when other people have already unlocked the writing for you? However, what if the net cost of subscribing declines with readership, so that if many people subscribe, the contribution requested is very small?

A simple way to do this would to impose a compensation cap. Suppose an author requests $5 per month or $60 per year with a $150K cap. If she accumulates 2500 subscribers, she’s hit the cap. Thereafter, revenue from additional subscriptions gets distributed pro rata as a refund to subscribers. If she has 5000 subscribers, each subscriber would get $30 back, making the net cost of supporting the author only $30 per year. If she has 50,000 subscribers, the cost drops to $3 per year, literally spare change, just a quarter per month, and the writing becomes part of a wide-open commons. Once an author has hit her cap, she still ought to (and I think still would) promote her work and try to get people to contribute. But her incentives would become egotistical and altruistic: Egotistical because public affairs writers want their work to be influential and widely available (as long as they are also paid). Altruistic because encouraging new subscribers would decrease the burden on writers’ already loyal subscriber base, and because more exposure really might contribute to the process by which ideas and insights make the world a better place.

A gentler approach might replace a simple cap with an asymptotic limit. Each dollar contributed would go to one of two pools, author payment or pro rata refunds. The first subscribers’ funds would go almost entirely to author payments, but as cumulative revenue increases, the share going to the author would decline, and the share going to refunds would increase, so that the author’s payment as a function of total revenue approaches a horizontal asymptote. Under this scheme, the transition from extrinsic peddle-subscriptions-to-pay-my-rent incentives to more intrinsic and altruistic incentives would occur very gradually. If one wanted to maintain some degree of financial incentive for authors to expand their contributor base and reduce subscriber burdens, the asymptotic limit could be by an upward sloping line, but with a slope much less than one, so that at the limit say 10¢ out of every new subscriber dollar would go towards the author, and 90¢ to the refund pool.

If you’ve got better ideas than these, please contribute them to the commons! We want to fund a lot of writing, of high quality and from a wide variety of points of view. But we want those voices to be independent, not just of particular institutions but also of the incentives imposed by variable remuneration. The humans are clever. Surely we can figure this out.

The “cap and refund” idea owes inspiration to and Clark Evans, ht Sigfried Gold. It bears some similarity in mechanics and in spirit to a suggestion by Ryan Cooper that a nationalized music streaming service pay out artists “progressively” — i.e. at gradually decreasing rates per-play, in order to encourage a musical commons conducive to a broad creative class rather than the winner-take-all status quo. The Glenn Greenwald quote is via Jemima Kelly‘s reporting, but the paragraph where I embed the quote is too wordy to include a hat-tip.

I want to add that this piece is not intended as an anti-Substack diatribe. I read and subscribe to a bunch of Substack newsletters, including some of the controversial ones. Overall, I think Substack has inspired a welcome renaissance in less institutional writing. I hope the current renaissance is a step on a journey to better things, that its concentration on a single platform decreases and that it evolves in a less winner-take-all direction. But overall I am grateful for Substack, and competitors like Ghost. If I were a better writer, I’d consider trying to make a living on these platforms myself.

Convenient, compulsory, compensated

Voting should be convenient, compulsory, and compensated.

We should all want everyone to vote. If this is a partisan issue at all, it’s partisan for like five minutes. It’s not actually clear which party would be hurt if everybody voted, but if one party were disproportionately harmed, it would just realign a bit. The US political system converges to a 50/50 electoral power divide, which under universal voting would move a bit closer to a 50/50 voter support divide than obtains now. You might argue that makes universal voting anti-Republican for the moment, since Republican power relies more strongly on disproportionalities in our electoral system. But that’s not right. The representation skew caused by the Senate, or by the vote-wasting overrepresentation of Democrats in dense places, would not be affected by universal voting. Unless the we reform redistricting, universal voting does not prevent gerrymandering. Given the 50/50 rule, so long as there remain disproportionalities of electoral power, one party or the other is going to continue to rely upon them.

If universal voting does have a near-term partisan effect, it will be by virtue of how current non-voters would vote, which absolutely nobody knows. Researchers and political professionals have no idea, because there is by definition no solid data. Opinion polling is notoriously bad even at predicting the behavior of “likely voters”, who are more reachable and easily characterized than nonvoters. Democratic partisans sometimes presume on the basis of crude stereotypes that voting expansion will always be good for them. Why are you sure Puerto Rico would be a blue state? (It should be a state if its public wants that regardless.) Any inferences you draw based on observed correlations between demography and voting behavior are confounded by a motherfucker of a selection effect. People’s choice of whether or not to vote is not random, and nonrandom in ways unlikely to be orthogonal to partisanship.

My guess is that under universal voting, both parties would abandon the fetishes of the weirdest, least popular elements of their coalitions. Our existing system gives tremendously disproportionate weight to motivated voters. Some people argue this is good thing. Why shouldn’t a democracy take into account the intensity as well as the prevalence of citizen preferences? Probably it should! But we already have way way way way too much of that good thing. In soliciting support before elections, and with every call they take after winning an election, politicians are overwhelmed by the tyranny of concentrated benefits versus diffuse costs. Our problem in politics is not underrepresentation of small, extremely motivated interests, whether industry lobbyists or righteous activists. Our problem is that the preferences and interests of the very broad public get overridden by those groups, and our polity is therefore so badly misgoverned it is in danger of collapse.

Under nonuniversal voting, turnout and suppression are inevitably dimensions of competition. But they are invidious dimensions of competition. I won’t waste words persuading you that competing to suppress the vote of your electoral adversaries is morally wrong and bad for democracy. Even avid practitioners concede the point, and mostly pretend suppression is not what they are doing. But conventional turnout competition is bad too. Uncompensated voting is a regressive tax. At best voting is a fixed cost, more burdensome to the less resourced. Affluent people with stable schedules, ready transportation, and spare attention have a built-in advantage. In practice, voting is more expensive, in terms of time and hassle, for poorer people, rendering it even more regressive. The goal of motivating turnout encourages drama and outrage rather than deliberation over tradeoffs. If the margin I am trying to overcome is “check this box, not that one”, we can talk about the benefits of the program and how the taxes will work. If the margin I am trying to overcome is “lose work hours you desperately need to stand in line, arrange childcare for that, pay for gas”, well, I’d better talk about how you are our last bulwark against authoritarianism, about how the other guy is Satan himself so failing to show up for our lone, beleaguered warrior would be a betrayal, even a sin. The recent Presidential election featured very high turnout, but I’m not sure you’d describe the foremath as a period of exemplary democratic deliberation.

Some of the biases of voluntary, uncompensated voting can be reduced by making voting more convenient. But, in a system where turnout and suppression are in fact dimensions of electoral competition, convenience reforms are non-neutral. They are likely to be supported by the side that sees electoral advantage in them and opposed by the side that thinks it stands to lose. Partisans may often be overconfident in their theories of how these reforms will (un)tilt the field, but nevertheless. You end up where we are, with one side emphasizing “voter access” (convenience reforms) and the other emphasizing “voter integrity”, which provides a not-facially-evil pretext for opposing convenience reforms.

This is not a great place to be! Because electoral integrity actually is a real concern. The integrity of the US electoral system is and has been in bipartisan doubt for some time. Before there were Trump operatives making stuff up about Dominion Voting Systems, there were people like Jenny Cohn and, well, me, worried about unaccountable touchscreens and “ballot marking devices” produced by ES&S and Diebold. In 2016, I think it’s fair to say that many Democrats were not 100% sure that Trump’s slim electoral margin might not have owed something to Russian incursions that went beyond publicly reported exfiltrations of information from state electoral systems. There is no credible evidence for what Democratic-leaning media have dubbed “The Big Lie” (or what diehard Trumpists call “The Steal”), and Trumpists’ attempts to circumvent the electoral authorities and courts whose role it is to adjudicate such evidence were despicable. But absence of evidence is not evidence of absence. If, however mistakenly, your priors were very strong that Donald Trump had it in the bag, it’s not ridiculous that with margins as slim as they were and the US electoral system as “loose” as it is, you might not have been persuaded of his loss. Again, this is no excuse for failing to accept the result — Democrats who felt the 2016 election was illegitimate didn’t invade the Capitol. To the very limited degree they promoted circumventing the outcome with electoral college machinations, that too was discreditable. We go into each election with the electoral system we have, not the one we might wish to have.

It is between elections that we get to improve the system, and improve it we should. We do want an electoral system the legitimacy of whose results are more sure, which produce more and more certain evidence in forms accessible to the public. It’s not ridiculous to be concerned about voting machines. With in-person voting, it is a bit ridiculous to be concerned about voter fraud, because the costs and risks of going to a polling place and lying about your identity are (or can be made) very high relative to the marginal effect an individual might have even on very close elections. However, with remote voting, voter fraud becomes a more serious issue, as the possibility of mass rather than one-at-a-time identity theft increases the potential effect, and the ability to perpetrate the fraud without physically turning up at a polling place reduces costs and risks. If this sounds like a Republican talking point, it’s also precisely why we don’t have internet or smartphone balloting, and shouldn’t any time soon. It’s hard to “hack” thousands of bodies showing up at polling places. It might not be so hard to steal the internet credentials of thousands of people and vote on their behalf from some perch beyond US law. Mail-in voting sits between easily securable in-person voting and clearly not-securable internet balloting. It might or might not be right to universalize it, and the raging of a deadly pandemic might legitimately affect the balance of costs and benefits. But we’re not having a meaningful conversation about those tradeoffs while what we’re really arguing about is access versus suppression.

In other words, we won’t do a good job of balancing security and convenience, we won’t even be able to discuss that balance, as long as election technique is subsumed in partisan competition over turnout and suppression. Compulsory, compensated voting would eliminate those dimensions of competition, and render electoral integrity a technical dispute within which both parties’ interests would be broadly aligned. This would make safe convenience a reachable goal. Convenient, compulsory, generously compensated voting would eliminate the structural bias towards the affluent, as the compensation would be more meaningful to the poor than to the rich. Convenient, compulsory, compensated voting would improve American governance, which is too much in thrall to very motivated parties and attends too little to the more diffuse interests of ordinary voters. Convenient, compulsory, compensated voting would quiet the crosswinds that make it impossible for the United States to competently administer elections because administrative choices and election-rigging are too difficult to distinguish.

Alex Kovner has a post I really like, “Start with the State“:

Most democratic discussions start with the people, and attempt to build structures from them on the principle of representation. This has resulted in some real gains for democracy, most notably the creation of the U.S. Constitution and the democratization of Europe, with changes such as the reform bill of 1832 in Great Britain. Nevertheless, it’s hard to point to any meaningful improvement in democratic structures since the 19th century. All the improvement has been directly tied to representation through the franchise, namely including women and minorities.

Instead, why don’t we start with the state, and ask what it needs to properly perform its broad social role of service to the people?

The reason to want universal voting isn’t (just) because all the people “deserve” representation. To be clear, I think they do. But maybe you don’t. You may think that layabouts who don’t value the franchise enough to endure its inconveniences deserve whatever government they get.

But if it is to govern effectively, the state needs to know and give weight in practice to its whole public’s values and interests. To do that, it requires some form of deliberate, secure, widely-agreed polling that enfranchises its whole public. The state has a strong interest in criteria for enfranchisement not becoming a dimension of political competition, as that is not conducive of deliberative excellence and undermines integrity of the polling.

Universal, secure, legitimate polling is a necessity of practical statecraft, and the quality of practical statecraft is the hinge upon which all of our fortunes in fact rise or fall together. Voting should be convenient, compulsory, and compensated.

A heathen’s Easter

I have always been a devoutly irreligious person. I’m not an atheist. I think that creed assumes we know far more about our circumstances than we actually do. But I found very little appealing about the religious tradition within which I was raised, and I’ve not been drawn to others. However, in recent years, I have developed some reverence for a certain aspect of Christianity’s founding tale.

“Love your murderer” is, I think, an ethical aspiration. That one ought to love in some fashion every human being does not mean that people shouldn’t be held accountable. Murderers and other doers of foul deeds should be punished to deter others, should be tasked with restorative work where such work can be done, should be segregated from society and deprived of some freedoms as long as they remain a danger to others. Failing as a society to insist on those things would be failing to love the humans more broadly. (I hope it goes without saying that we should love our murderer because they are human, not because they are our murderer.) But when we punish, deter, or restrain our fellow humans, that ought to be an occasion of sad necessity, not joy or righteous vengeance. We should be very humble in any suggestion that pain we impose constitutes “justice”. Taking pleasure in the harm or punishment of someone who has hurt us is understandable and effusively forgivable, at a personal level. At a social or political level, however, it is noxious. It deforms us. It provokes us to terrible acts, sometimes in the name of, rather than in opposition to, the law. Individually, it is understandable when we sometimes take self-righteous pleasure in other people’s harm. I do, far too often. But it is the opposite of an aspiration. It is a lapse.

Obviously, the Christian story is an example of a person loving his murderers. And for that alone, it draws from me a certain respect. But a few years ago my wife and I had a child, and the part of the Catholic Holy Trinity I identify with shifted, perhaps egoistically. It occurred to me that there is so much focus on the son, who forgave his own murderers. But what about the father, who is called upon to forgive the murderers of his child? “Love your murderer” is an ideal I can at least conceive of aspiring to. But “love your child’s murderer”? Intellectually, the case is the same. We owe love to the humans, unconditionally and universally. That is the foundation of human virtue. But, as the kids say: I. Can’t. Even. I can’t let my mind go there. It is too great a betrayal, at an emotion level, of the star around which I orbit.

My theological sophistication is about candy-wrapper level. But for whatever it’s worth, I consider this aspect of Christianity’s founding myth or event remarkable, and underemphasized. “Forgive them, Father, they know not what they do,” represents a profound plea from the lips of a man being painfully murdered. That a parent, one with fire and brimstone readily at hand and a notorious history of smiting, would forgive is perhaps even more astonishing, even more wonderful.

The history of Christianity, especially at the social and political level, imperfectly evinces this ethos which I draw from, or project onto, the tale. Nevertheless, I think the ethos offers crucial lessons for us now. All of our political factions, even the ones who coined the pejorative term, slip frequently into “othering” one another. I take that to mean a withdrawal of the love, or even the aspiration of love, from some group or class of humans, often because “they” are purported to be vicious or guilty or dangerous, to have harmed us or our values or people we hold dear. There is a lot in our social affairs that needs changing, and there will be losers as well as winners from those changes. In a broad sense, I think if we act well and wisely, there will be many fewer losers than we fear, because our misarranged society exacts terrible costs even upon most of its “winners”. We reform society out of love for humans, to create scope for greater flourishing. But when people are harmed, whether transiently or durably, that counts as a cost, regardless of how wicked we persuade ourselves are the losers. That there will be losers is no excuse for inaction, in the same way that our love for a murderer mustn’t inhibit us from sober punishment. We owe a duty to all the humans. However difficult it may be to quantify human welfare, as best we can we must find ways of improving it. But the eggs we must break are losses to be minimized, not righteous smiting of the vicious. To whomever you are shouting at, owning, canceling, legislating against, you owe a duty of love. Aspire to love even your murderer. If you are better than me (and I assure you, you are), aspire to love even your child’s.

Happy Easter, to all those who celebrate it. And to all of those who don’t.

Update History:

  • 04-Apr-2020, 4:25 p.m. EDT: “there will be losers as well as winners, from those changes”; ” But to the degree when people are harmed, whether transiently or durably, that…”; “…the eggs we must break are costs losses to be minimized…”

Liberalism and class

The success of people like Donald Trump and Victor Orbán has deeper roots than the charisma of a few demagogues. It reflects a potentially fatal weakness of contemporary liberalism that liberal political coalitions have not seriously addressed. Quite simply, liberalism as practiced in the broad West since the 1980s becomes coded as elite and upper-class, not because the public is misled by charlatans but because the public is perceptive. For “liberalism as practiced…since the 1980s” I might have used the term “neoliberalism”, but I want to emphasize I am not referring (just) to the project of expanding the scope of markets and market-like institutions, even to domains formerly insulated from them. Aspects of liberalism so foundational they are indistinguishable in liberal communities from virtue predictably become polarized by class.

Three pretty basic liberal values include

  1. the right to live as, where, and among communities one chooses, so long as those choices don’t harm others, under a narrowly circumscribed conception of harm;
  2. that competition for social goods (like jobs) or imposition of social sanctions (like punishment for crime) should be administered according to predefined formal procedures, “neutral” with respect to the identities of the parties; and
  3. that one has an obligation to be tolerant of, and interact cordially with, people of widely varying lifestyles, beliefs, and communities (a kind of complement to the first value)

All of these values I think have become polarized by class, not just in the United States with our peculiar history, but throughout much of the West and especially the recently liberalized, post-communist East.

It is not hard to understand why. The right to live as, where, and among communities one chooses is only valuable to the degree that it is practical and ethical for a person to exercise that right. Among the affluent, the costs of uprooting oneself from where one happens to start to some other community of ones own choosing are tolerable, both to the uprooter and the community left behind, because affluent people rely upon portable financial capital and impersonal markets for most of their requirements. In less affluent communities, people’s wealth and insurance against adversity are bound up in very personal relationships, which get destroyed rather than transported when a person “abandons” her roots. Professional class Americans follow their careers around the country, relocating between liberal cities and college town with remarkable ease, paying expensively for new child care in each. Working class Americans are much more likely to rely on family to render child-rearing manageable and consistent with their jobs. Among the affluent, elderly parents can be left “on their own”, because deliveries can be paid for, rides can be hired, if necessary more intensive, personal help can be paid for. The downscale elderly rely much more upon unremunerated help from children and church, upon the goodwill of particular human beings. When people upon whom they rely leave, they simply become poorer. For the person who might choose to leave, this cost they might impose pits liberal “rights” against very visceral obligations. A person who has faced that dilemma, and chooses to stay, might understandably view the kind of people who make the opposite choice as selfish.

Alternatively, an economic migrant who feels compelled to move somewhere he would not otherwise choose in order to help those he’ll leave behind might not count his exile as a blessing of the liberal order. He may think the cash he’ll send home is more valuable than whatever his presence could offer, but his family will still be broken. Liberalism gains adherents from the promise of choice, but creates cynics when the choices are so bad it feels like compulsion beneath a velvet glove. Which you experience depends very much on affluence.

The class valence of our second value, procedural fairness, is more obvious. We all understand that however formally neutral, almost any institutional procedure is gameable, and people with lots of resources will tilt the odds in their favor in ways unavailable to people with less. If you are accused of a crime, what is more important, your actual guilt or innocence, or the quality of legal representation you can afford to engage? The answer is not obvious. We invented standardized testing to make fair and neutral decisions in academic admissions, and then we invented the SAT prep industry by which the wealthy could gain an edge. The IRS acknowledges that it enforces our ostensibly neutral tax laws disproportionately against the not-so-wealthy, even though the wealthy hide more dollars from the fisc, because despite ostensibly neutral enforcement procedures, the IRS can afford to go after the working class but is outgunned when it goes up against the rich.

It’s not just that the game is rigged. It’s that there’s no game we can invent that plausibly would not be rigged, given the yawning differentials of resources that now prevail in our society. Throughout the Trump Administration there was a chorus of “career professionals” each day shocked anew by some violation of procedural norms. The Inspectors General were fired! I’ll admit, I was outraged too. But I’m of their broad social class. The outrage did not catch fire so much beyond the ranks of career professionals, because most people accurately understand that under the weight of contemporary inequities, the liberal ideal is already something of a sham. From the perspective of those who will always lose anyway, which is worse, to lose under institutions about whose professionalism and neutrality hymns are sanctimoniously sung, or to lose in what is obviously a kangaroo court? The latter does less violence to your dignity.

You may say this is overcynical, and I’ll agree. (I would, wouldn’t I?) However infertile the soil for fairness and impartiality, we’ll get more of it by assiduously trying than by giving up all hope and just cackling while we summarily execute the meddlesome poor. But try as we might (and we really do try!), we succeed at best partially, and the contours of our success cannot help but bend to the terrain of wealth and class. Differentials of economic and institutional power in our society are simply too great for our efforts to yield outcomes that are even plausibly fair. Why should the people on the losing end of this get bent out of shape in defense of “liberal norms”? Why shouldn’t they entertain hopes of a more honestly, overtly, accountably hierarchical order of which they might not be the bottom rung? Support for liberal norms and procedure rises with economic and social class, because liberal norms and procedure only deliver a colorable simulacrum of fairness for people in higher social and economic classes. Everyone else is understandably open to alternatives.

Finally there is the obligation that is the flip side of liberal choice and diversity, the requirement to be tolerant. This doesn’t sound so hard or class-stratified. You do you, I’ll do me, we’ll all get along just fine. But we’ve already seen that the stakes of interpersonal conflict and controversy are higher in communities where people’s material security depends upon direct intercourse and approval. If you’re affluent and your neighbor is freaky, that’s cool, you still send your kid to day care. If you can’t afford daycare and your neighbor is freaky, do you still send your kid over while you work a shift? Deviance imposes higher costs within communities of direct, reciprocal interdependence than it imposes among affluent communities whose material needs are provided for by markets. This takes its toll on the balance of values between toleration and conformity within such communities.

More pressingly, liberal societies do not demand toleration only at an individual level. An essential fact of liberal societies is we are permitted to segregate into communities reflecting diverse choices of lifestyle, profession, interest, etc. Individuals who do not choose to so segregate, or who do not have the means to choose, are nevertheless segregated by virtue of the people who leave. The obligation to be tolerant in a liberal society then shades from a kind of negative requirement — “try not to be a dick” — to a positive requirement of understanding the sensibilities and sensitivities of diverse communities and taking care to respect them. On the cultural left this is sometimes referred to as “code switching”. More broadly it might be understood as diplomacy.

Code-switching or diplomacy, it’s a hard thing. It takes time, practice, and careful attention to manners and mores. It is work, and the kind of work for which the verbal gymnastics of a formal education really helps. People from affluent communities have that advantage, and they have more resources to devote to the work, than people from poor communities. Some communities self-segregate so hermetically that members face very little need for diplomacy, in the same way many Americans see little reason to learn a foreign language. But poorer communities cannot do that, because they require access to resources that become available only by interacting with more upscale communities. For members of poorer communities, the burdens of diplomacy are high, yet they have little choice but to try and often fail to bear them. The “meritocratic” professional class, since it purports to recruit talent and serve clients from diverse communities, increasingly makes fluency and attentiveness to this kind of diplomacy a non-negotiable requirement. But this has the paradoxical effect of further isolating this class from the bulk of the public, for whom the burden of staying current with everchanging mores is simply too much. Yet the professional class disproportionately sets social expectations, leaving much of the public conscious of a kind of inadequacy, and resentful of a set of requirements that feels artificial and courtly and that clearly has the effect of excluding and disadvantaging them. The requirement of diplomacy has become a kind of regressive tax. The same high standards are expected of everyone, but only a certain class of people can easily afford to meet them.

Thus toleration itself, expansively defined, has become a regressive tax, helping cement the class valence of liberalism. Matt Yglesias gets into trouble on my Twitter timeline criticizing an “antiracism of manners”, but I think this is what he’s getting at, and I agree it’s unsatisfactory. The trouble is there’s no way out. One can’t demand that some communities be less sensitive without acknowledging that the mores of powerful communities will always be nonnegotiable (the original context for code-switching). Either liberal professionals require those within their ranks to be elaborately diplomatic towards diverse, less powerful communities, and by doing so set themselves apart as a peculiar and exclusive elite, or they don’t and everyone has to code-switch to accommodate the most affluent and powerful communities. In a less class-stratified society, it might be possible to define a kind of Esperanto into which everyone would be expected to acculturate for public purposes, in the way that English is Singapore’s public language even though it’s almost no one’s native tongue. In contemporary America, this would collapse to illiberal domination.

Putting all of this together, I think it makes perfect sense that liberalism has become a kind of upper-class creed. So long as it is, liberalism is in peril, and should be. There are illiberal currents on both the left and right that would exploit popular dissatisfaction to remake society in ways that I would very much dislike, whether by restoring a “traditional” hierarchy of implicit caste, or by granting diverse professionals even more prescriptive authority than they already have at the expense of liberty for the less enlightened. My strong preference is that we do neither of these things, and instead restore the broad appeal of liberalism by “leveling up”. We should ensure that everyone has the means to rely upon some mix of the market and the state to see to their material welfare, reducing the economic role of networks of personal reciprocity and history. This would render the good parts of liberalism more broadly and ethically accessible. Reducing economic stratification makes liberal proceduralism more credible pretty automatically. When economic and institutional power are dispersed and broadly shared, no one has a built-in edge, and aspirations of neutrality and fairness become plausible. Once we view society less through a lens of domination and oppression — because in a more materially equal society that will be a less credible lens — it will become possible to agree on a common, stable set of commercial and professional mores rather than extend deference to myriad communities’ evolving sensibilities. It will be practical for the broad public to learn and understand those common mores, and so not be excluded or set apart from professional communities by what come to seem like inscrutable courtly conventions.

There are undoubtedly tensions between liberalism and egalitarianism. But they are yin to one another’s yang. Opposites in a sense, they must be reconciled if either is to survive.

Fix the Senate III: Stochastic Gong Show

American government has an obvious problem. The only elected official held accountable for whether the government as a whole is effective is the President. But the President, under our checked-and-balanced system, cannot govern effectively without the active cooperation of Congress.

For members of Congress, how effectively we are governed during their tenure is basically a non-issue. Representatives are held accountable not for how the country is doing, but for the bills they personally sponsor and for how they individually vote. They have every incentive to pander pointlessly to key constituencies and to avoid contentious votes that might anger people, regardless of how essential the issue. Ultimately, the public interest is bound to the portfolio of legislation a Congress produces, while a legislator’s interest is bound to the popularity of individual bills and votes they become identified with. And to the unpopularity of votes they can avoid becoming identified with — much of why we have an “imperial” Presidency is because, on matters like war and peace for which Congress is Constitutionally responsible, our representatives rationally abdicate. They prefer to cede hard calls to the executive, so they cannot be blamed for whatever happens.

This helps explain a stylized fact of American politics: The public detests Congress as a whole, but loves their own representatives. Each member of Congress tailors her actions to keep the love of her own constituency, and usually succeeds. But all that preening and ducking of controversy fails to compose to an intelligent portfolio of legislation, conducive of high-quality government. Even when a single party controls Congress and the Presidency, for most representatives, the electoral cost or benefit of how well the country is governed under their party’s “brand” is modest compared to the personalized costs of a vote that might upset important constituents.

We would be better governed if Congresspeople had a stronger stake in the success of their legislative bodies as a whole than they had in their personal popularity with constituents. But we have no institutions that rewards elected officials for the collective successes, or punishes for the collective failures, of the bodies they constitute. We should create such institutions.

Suppose that at every Federal election, a yes/no question were placed on the ballot. “Do you approve of the job the US Congress is doing?” The result would be aggregated, one person one vote, into a national approval rating. Senators are ordinarily guaranteed six-year terms. But suppose (following the Constitutional amendment that would be required to enact this) each just-reelected or two-year-in Senator stood in jeopardy of losing their protracted terms, and being forced to stand again for election in just two years. For each such Senator, we’d perform a lottery in which the probability of having their terms abruptly shortened would be (1 - approval_rating). If Congress had a 100% approval rating, then senators could be as secure in their jobs as they are today. If Congress has only a 33% approval rating, however, then two-thirds of incumbent senators who might have looked forward to four or six years of job security would find themselves thrown untimely before the tribunal of the people. This would create a strong incentive for Senators to govern in ways that not only endear them to their own constituents, but also persuades the national public that Congress as a whole is discharging its duty of representation and governance well. [*]

I call this idea a “Stochastic Gong Show”, after the television variety show during which judges would cut poor performances short by banging on a gong. We would all stand in judgment of Congress, as we should. But rather than deterministically ending bad numbers with a bonk, we’d decide the risk our players face if they fail to choreograph a dance that delights the public.

An objection might be that it would only apply to senators, who would be judged for the performance of Congress as a whole. But maybe that’s okay. The Senate in practice is the more powerful house of Congress, populated by the more senior members of each party who are not without influence over their colleagues in the other chamber. If Senators really need Congress to work, they can go a long way towards making it happen.

A practical objection is that, under the only Constitutional amendment process ever thus far used, a supermajority of the Senate would have to approve adoption of this proposal, whose function and intent is to make senators uncomfortable, for the good of the nation. However, anything is possible if the public is sufficiently convinced it’s a good idea. “Stochastic Gong Show” sounds like a dorky thing attractive to people like me (and not just) who think injecting some randomness into democracy could do a lot of good. But the basic idea of a mechanism that automatically throws the bums out when, overall, we agree they’re doing a crappy job, strikes me as one that could be popular.

Notes: I first presented this idea a couple of years ago. It owes something to this proposal by Robert Merkle, who similarly proposes using an approval rating to drive political institutions, though he goes well beyond that, proposing (after Robin Hanson’s “futarchy“) that policy choices should be driven by market-predicted approval ratings conditional upon adoption.

[*] If this level of risk seems too strong, the formula could be generalized to 1-(k+approval_rating)/(k+1), for a chosen value of k. If k is zero, we have the original formula. If k were 1 and Congress’ approval rating was 33%, each senator’s risk of a shortened term would be 1-(1+1/3)/2, 1/3 rather than 2/3.

Office Hours: I’ve taken to doing Zoom office hours on Friday afternoons, 12pm Pacific / 3pm Eastern / 8pm. If you’d like to join, let me know by e-mail or Twitter DM or in the comments here and I’ll send you an invite. (If you use your real email when leaving a comment, I’ll have it but it won’t be published.)

Fix the Senate II: Integrate

One way to address the absurdly disproportionate representation of the US Senate is to take it as a challenge, rather than a problem. The broken Senate does not in fact represent some kind of “wisdom of the Founders”. They knew it was a mess. Here is Alexander Hamilton (as recorded by James Madison), opining presciently:

Another destructive ingredient in the plan, is that equality of suffrage which is so much desired by the small States. It is not in human nature that Va. & the large States should consent to it, or if they did that they shd. long abide by it. It shocks too much the ideas of Justice, and every human feeling. Bad principles in a Govt. tho slow are sure in their operation, and will gradually destroy it.

States were given equal Senate representation despite vast differences in population because the ratification of the Constitution required smaller states to sign on, and without this concession they would not. There was not much pretense of principle in the thing. It was a politically necessary compromise.

Nevertheless, in the spirit of lemons to lemonade, let’s suppose there could be some virtue in the arrangement. What might it be? Well, the disproportionality of representation is only harmful to the degree that smaller states as a group have interests at variance with larger states. The political party whose power currently depends upon the Constitution’s several disproportionalities has taken to a rhetoric of the “left behind”. If one wanted to impute wisdom to what in fact was crass compromise, one might argue that the purpose of the Senate’s “equal Suffrage” of states is to make sure that smaller political subunits, which are individually less influential, could not as a group simply be ignored or left behind by the centers of population and industry. That comes to “shock…the ideas of Justice” only when there are stark divergences in values and interest between political subunits sorted along the dimension of population size. If voters in small states (as a group) behaved similarly to voters in big states, the Senate’s disproportionate enfranchisement of small states wouldn’t matter. There shouldn’t be two Americas, one predominant in small states, another in big states, whose values and interests sharply differ. Our fortunes should rise and fall together. When the states’ equal Suffrage in the Senate is a live issue, it means that we have failed, as a country, to integrate.

As a practical matter, how could we cure this divergence between the interests of small states (as a group) and larger states? Two approaches are obvious. The simplest but not sweetest approach is to simply augment the existing group of small states with new states whose values and interests would make the full complement more closely resemble big states. Under contemporary partisanship, if we make a city-state of Washington DC, the mostly Republican politics of small states as a group would shift a bit towards Democrats, because the urban density that would characterize this new state is a key predictor of Democratic vs Republican politics. If Puerto Rico were made a state, the ethnoracial demographics of small states as a group would come to resemble larger states and the nation as a whole more closely. [*]

Diluting away the differences between smaller states and larger states is a straightforward approach to remedying the Senate’s legitimacy crisis, but it is also an ugly way. It leaves citizens of current smaller states understandably cynical that beneath all the high-minded talk of proportionate enfranchisement, the goal is simply to override their interests in a sphere where they happen to have an advantage. Statehood for DC and Puerto Rico are just causes on their own terms. Regardless of their partisan inclinations, the populations of those territories ought not be disenfranchised. But gerrymandering (or degerrymandering) the Senate for partisan advantage is zero-sum hardball politics. I’ll take it if the alternative is the other guy’s hardball bonks me on the head. But I’d prefer other ways.

A better, but slower and harder, way of addressing the Senate’s legitimacy crisis is to address the causes of the divergence of interest between small and large states that leads to divergent and extreme partisanship. Strong predictors of US partisanship now include urban versus rural, more versus less formal education, less versus more religious, nonwhite versus nwhite, young versus old, and female versus male. Controlling for these other factors, “poor” versus “rich” is not, I think, a reliable predictor of party identity in the United States. (Am I wrong?) That strikes me as extraordinary in a country where one party still gets coded “left” and the other “right”. Furthermore, at the state rather than individual level, affluence (in per-capita GDP terms) correlates with Democratic rather than Republican party identification, and smaller states are likely to be poorer. The Senate does, in this sense, overrepresent Republicans as the left-behind.

There are lots of ways that groups of states could diverge from one another, but if we are interested in addressing the Senate’s legitimacy crisis, we should want to encourage smaller and larger states to become more alike along these dimensions that become entrenched in partisan politics.

Robert Manduca has a wonderful essay on “place-conscious” policy. “Help people, not places” is an econowonk catchphrase that is finally, fortunately, finding its way to the rubbish heap. For most people, the costs of relocation are high. Humans are not like the atomic individuals economists commonly model. That academics and career-driven professionals are geographically mobile renders them an exception they too often mistake for normal, or impose as a norm. You cannot help most people independently of the places and communities to which they belong. To require geographic mobility — interneighborhood, let alone interstate — is to impose harm upon the lived communities that substitute for capital among all but the most affluent classes. If your values, like mine, are liberal, you cannot help but want to enable geographic mobility. To be sure, the space between “require” and “enable, between coerced and voluntary, is always a spectrum, a continuum, a slippery slope. Still, we should strive to create a world in which, for most people, staying where you’re from is a fine option, but it’s easy to go elsewhere too. And (contentiously when you think about it this way) we should strive to bring more people into the affluent classes, so that people need to rely less upon particular relationships for risk management, so that the freedom whose flip side is rootlessness becomes less harmful.

We should want poorer states to become richer, in per-capita terms, and the divergence of prosperity across states to decline. Just as the law in its majesty forbids rich and poor alike to sleep under bridges, liberalism in its majesty enables rich and poor alike to uproot themselves and choose their own communities and lifestyles. If Mississippi were as prosperous as California, a greater share of citizens in Mississippi would become more “liberal” in the simple sense of valuing choices that liberals value. But those choices mean little to those who cannot exercise them, because they are not rich enough, or because they are relied upon by others who cannot afford to depend solely on the market for support. There are lots of policies that could help to equalize prosperity across places, including a UBI (whose level, importantly, would not vary by local cost of living), a high Federal minimum wage; and airline reregulation that prioritizes universal service at similar rates, rather than “efficiency” and cheap fares for the most competitive markets.

Smaller states are disproportionately rural and low density, while larger states are disproportionately urban and high density, contributing to (or at least predicting) their partisan tilt. Every state of the union has cities, though. Adopting policies that encourage development and growth of smaller and midsize cities, perhaps at the population expense of contemporary superstar cities in high population states, would help bridge the partisan divide. The experience of the pandemic, and the normalization of remote work, may go some way towards this result even without new policy. Matt Yglesias points out that (absent some subsidy through policy), refugees from superstar cities are more likely to move towards places with a low cost of living and nice weather or tourist amenities than they are to the struggling post-industrial cities that policymakers often seek to “revive”. But from the perspective of integrating small and large states, that’s probably okay. Nice weather and tourist amenities are much less concentrated in high population states than superstar cities are, and smaller states tend to be cheaper to live in. Tesla and Oracle are huffily relocating their headquarters from California to Texas, and some Silicon Valley VCs are making a big show of migrating to Miami. The irony is that while principals and VCs are looking for red-state amenities — lower taxes and lighter regulation — they will carry with them large workforces of educated professionals, who are likely to shift the political cultures of their new homes blue. The result will probably be more “purple states”, which are great for national cohesion. But it would be even better if this tech exodus to red, cheap states alit on smaller, warm states like coastal Mississippi, or tourism havens like Maine, Montana, Idaho, and Utah, to develop new headquarters. Wyoming has tailored a regulatory environment friendly to blockchain fintech, but that seems to have drawn corporate domiciles more than human enterprise so far. Wyoming is beautiful! Go forth, my cryptolibertarian friends, and actually build your cryptoutopia there! Smaller, poorer states are friendlier to new development than more crowded and prosperous states, and several have stunning places not as resort-famous. The Dakotas, Arkansas, West Virginia are all great candidates to develop de novo tech hubs attractive to megacity refugees. Small-state cities are also great candidates for diversifying the geographic footprint of the Federal government. Conversely, we should think about ways of strengthening (perhaps subsidizing) rural small towns. That would both diminish the prosperity gap between smaller more rural states and large states, and it would revitalize rural areas in big states, decreasing the urbanization gap from the other direction.

Educational “attainment” tends to distinguish smaller states from large. Noah Smith has argued that non-“elite” colleges and universities could be key nuclei for revitalizing rural parts of the United States. Smith emphasizes the stimulative effect of university research rather than teaching, pointing out that undergraduates often move away after graduation. But I don’t think that’s so true of less elite institutions. The United States’ community college system is a tremendously underrated asset that could help bridge a wide variety of social divides. If we allowed community colleges to earn accreditation to confer four-year degrees, they could do a tremendous amount to overcome education polarization, working within more geographically rooted communities. A Federal program aimed at expanding the scope and reach of community colleges (which could and should be made tuition free) would be popular throughout the country. On both cultural and local-economic grounds, supporting community colleges is more broadly acceptable than supporting flagship state research universities (or elite private higher ed). Small state Senators would I think support a community college expansion, particularly if it included some targeting towards places where the share of college graduates is low. The net effect of such a program would be to reduce the polarization of educational attainment between small states and large.

Ethnoracial and religious polarization are harder to address, because the legitimacy of policy that directly targets these “identities” is contentious in the United States. Policies like those described above would, I think, also encourage demographic convergence. If we did want to tackle demographics more directly, I still think “neoliberal desegregation” might be a good idea.

This post has become a laundry list of policy suggestions. But let’s pull back again to the big picture. The design of the United States Senate means that, if there are systematic divergences of values and interest between small and large states, the nation will be subject to legitimacy crises. On the one hand, the remarkably disproportionate influence of smaller states in the Senate makes a mockery of one-person, one-vote democracy. On the other hand, the authors of our Constitutional adopted this framework eyes-wide-open, precisely because small states would not consent to joining a union in which their voices would be consistently overwhelmed. Altering the “equal Suffrage” of states in the Senate is foreclosed even by Constitutional amendment. The only way to mitigate this tendency towards corrosive crisis is to ensure that differences of interest between larger and smaller states are generally modest. When, as now, those differences become large, the stability of the nation requires that they be addressed. One way they could be addressed is by adding states, small states whose values and interests are like existing big states, or big states whose values and interests resemble existing small states. But that’s a bit ugly, as it seeks national comity by overriding the preferences of existing states, diluting them into a country where they might “democratically” be ignored. Alternatively, there are policies, including place-based economic development, support for midsize cities and small-towns, and expansion of community education, that might be welcomed in states large and small, while reducing the divergences that threaten the democratic character of our union. We should pursue such policies aggressively.

[*] However, I don’t think it’s remotely clear that Puerto Rico would favor Democrats. Two out of the last three of the island’s non-voting House delegates identified as Republican, and education polarization would place the island squarely among the red states. Statehood for Puerto Rico would be good for the US in part because Republicans would contend for it, and would be a better party for having to contend for it.

Note: I accidentally hit publish while I was still editing this piece, then reverted it to draft status. If you happened to see the version I let briefly slip, there’ve been more and more substantial changes than I’d usually allow without an “update history”. The intended “final” publication time was 9:28 EST / 6:18 PST on February 2, 2021.

Fix the Senate I: Scrap the filibuster

The United States Senate is a catastrophe.

It is prima facie anti-democratic: 38 million voters in small states have 15 times the representation as California’s 40 million voters. Extra-constitutional Senate rules and practices, most notably the maximalist filibuster, have turned the body into a “kill switch“, one veto point to rule them all. They have enabled a minority faction to block and obstruct, to prevent any constructive governance at all except when it will redound to the political benefit of that faction. Institutions of government matter. “Democracy” is not some free-standing good thing. If it is to be good, and if it is to survive, it must be embodied in particular, functional institutions. In the contemporary United States, that is not the case.

The Senate is hard to fix. Disproportionate representation of citizens in the Senate (described as “equal Suffrage” of states) is specifically excluded from amendment by the Constitution. In this series, I’ll describe three reforms that I think would improve the Senate, ordered from least to most speculative. The first is easy to enact and very widely discussed. I’ll just add my voice to the chorus.

Right now, this week, we should improve the Senate by eliminating the filibuster. Ryan Cooper has an excellent piece on how this would work (with a pointer to Akhil Reed Amar, whom I love for his work on lottery voting).

I’ve come to oppose the filibuster reluctantly and with some sadness. In a better-arranged polity, modest supermajority requirements might play a useful role. A democracy at its healthiest governs by persuading a broad center, rather than lurching back and forth between irreconcilable agendas of hostile but nearly balanced factions. In defiance of the median-voter-theorem, tack-to-the-center claims made on its behalf, the United States’ two-party system, has reshaped us into two hostile factions, nearly balanced not in absolute numbers but in terms of how our system translates numbers into power. We are, as Lee Drutman puts it, caught in a “doom loop” that is entirely an artifact of a bad political system, not the existential struggle between distinct peoples too many of us are lazily permitting themselves to conceive. Simple majoritarianism is a cause of this catastrophe, as it tempts people to govern with 50% + 1 coalitions that entirely ignore the values and interest of the other 50%. This is an ugly kind of polity. However, the Senate’s effective supermajority requirement via the filibuster has not overcome the incentives of the two political parties, and the incumbents they run, to divide us. It has merely incapacitated us. The filibuster has become a minority veto, which, given the disproportionality of representation within the Senate, could in theory be exercised by Senators elected by fewer than 10% of voters. In practice, it’s not quite that bad, but still terrible. Under current circumstances, a blocking coalition of Republicans can be mustered from Senators representing only 25% of the population, elected by a share of voters even smaller than that. (Even in red states, Republican senators occasionally receive less than 100% of the vote.)

There is a case to be made for a supermajority legislative threshold. But an effective 75% threshold in terms of population represented (ignoring incomplete support among voters) is a prescription for paralysis. Worse, the threshold is asymmetric. While Democrats face that 75% threshold, Republican-backed initiatives pass with assent of representatives of only 54% of citizens. This is an institutional embodiment of “my way or the highway” for the Republican Party. Both parties can force inaction, only one can enable it, despite approximately balanced support within the population. [*]

A principled supermajority requirement might be established in the House, rather than the Senate, in combination with redistricting or other reforms that ensure representation in the House is proportionate to voter support. The current Senate filibuster is simply indefensible. The Democratic majority should scrap it, today.

[*] A bit of an irony that I’ve not seen discussed is that in 2020, Democrats gained control of the Senate, but actually lost the chamber’s overall popular vote to Republicans by a slim margin. (The numbers cited exclude the George special election results, but they’d not change the basic picture.) In 2018 and 2016, however, Democrats won more Senate votes than Republicans, by substantial margins, but did not win control the chamber. Obviously, the US Senate’s composition during any given Congress reflects the results of three elections, so even if we adopted a voting system that made representation in the chamber proportional by party to overall votes received, a given cycle’s winners would not necessarily gain control. However it’s a bit weird and wacky that Democrats gained seats and control during a cycle when they lost the popular vote, while in 2018 Democrats lost seats despite a blowout popular vote win. The quirks in our system can cut both ways.

Missing the forest

Atrios does a good job of capturing how I actually feel about people on the so-called center-left (most notably Larry Summers) wonkifying their way out of support for near-universal $2000 checks. They are mistaken on the narrow technocratic grounds over which they claim authority, an authority that decades of experience prove they absolutely do not deserve. But they are mistaken (or worse than mistaken) at a more fundamental level. They do not get (or if they do get, they have never deigned to address) that the point of universalist benefits isn’t to stimulate the economy, nor to maximize utility while minimizing a fiscal outlay, but to reorder the relationship between citizens, the state, and one another.

Let’s start with the most straightforward case against $2000 checks. Here’s Catherine Rampell:

Simply put, sending money to nearly every American family to ensure that help gets to the much tinier fraction who actually need it is not a terribly efficient use of resources. The payments end up being a pittance for higher-income, fully employed households, yet insufficient for the households that suffered large income losses. The error is compounded if these funds come at the expense of more targeted relief measures — such as expanded unemployment benefits, which the new law guarantees only through March.

Advocates on the left argue that there is room to do both. But even if you believe that there are no real debt constraints, given how low interest rates are, there are still political constraints. Republicans set a $900 billion cap on relief measures in the final deal, which meant that funding stimulus payments required shortchanging unemployment benefits (and state and local assistance).

First, it’s worth noting that Rampell is misleading on the facts here to help buttress her case. It is true that Republicans initially tried to cap the deal size, and so that when $600 checks were included in the current version of the relief bill, the funds were clawed away from other uses. However, the cost of a potential increase from $600 to $2000 was never proposed to be taken from elsewhere. What Republicans like Donald Trump and Josh Hawley proposed was to simply increase the size of the bill.

Rampell is taking a constraint as given, immutable if not by hard economics then by hardball politics, even when by the time she wrote, the constraint was already contested within the political caucus supposedly imposing it. But political constraints are endogenous, and the very purpose of universalism is to reshape them. It blows my mind that Rampell quotes an estimate that the proposed checks would benefit 94% of US households like that is a bad thing. If you believe (as I think Rampell does!) that a just and functional polity will require a larger state footprint in fiscal affairs (which need not not imply bigger deficits, but larger gross outlays which may or may not be matched with offsetting taxes) then surely the program’s benefiting lots and lots of people should be scored a plus!

If you imagine you are the wise planner, given $400B-ish to spend as you choose, then yes, maybe you could do more good with some allocation other than universal-ish checks. But who is living in political fantasyland in this thought experiment? The $400B only exists as potentially allocable money because universal outlays are popular. And a state that typically provides benefits on universal terms will be popular in general, relaxing constraints on further state action — on outlays, but also on progressive taxation, which the state’s beneficence will render more palatable. And progressive taxation will help target net benefits, despite untargeted outlays, relieving economic (as opposed to political) constraints on state action, while also countering democracy-corroding wealth concentration and improving the predistribution. It’s win-win-win!

Paul Krugman writes

No binding budget constraint for the feds, so this is all about politics. And my sense is that broad issuance of checks is actually kind of a loss leader, helping to sell a package that includes UI

At the time he wrote this, still-too-stingy UI had already been passed and signed into law as part of the relief package, and no further expansion was on any political horizon. So maybe original the $600 was the sugar for a broader public to help make more desperate medicine go down, but, as with Rampell, there’s this reluctance to acknowledge that universal benefits might be worthwhile on their own terms because the space of the politically possible expands when broadly everyone is a beneficiary. An increase now from $600 to $2000 wouldn’t be a “loss leader” for any other thing. It would, however, increase the public’s satisfaction with and broad enthusiasm for government and therefore increase the probability that America rediscover’s the virtues of collective action in some broadly general interest, without which we face an apocalypse.

Technocratic authority so often just gives cover to myopia. It’s easy enough to compare different allocations of a hypothetical $400B, and sound smart dissing the “untargeted” one as suboptimal. It can be gratifyingly technical to compute (under tendentious assumptions) little cost-benefit analyses, one controversy at a time, taking the horizons of any deeper future as given, immutable as a lazy shorthand for unknowable. That is a way of sounding smart while being stupid. It has gotten us just where we are.

Judged not as a one-off, but as precedent and practice, universalism is good policy on technocratic grounds. Myopic optimization in response to every shock scrambles incentives (as people try to account for ways their actions might place them in or remove them from classes that will seem worthy of assistance). It creates embittered losers every time, people who feel deserving of aid but whom policymakers decide (optimally or arbitrarily) to exclude. In practice ad hoc optimization is gamed (see, for example, the contemporary PPP program), leading to widespread perception, and also the reality, of corruption, further discrediting government action. The Obama-ites thought their financial crisis response was “smart”, putting out fires while putting wooly concerns about justice and power to the side. It was optimal in the same way that the next dose of heroin is optimal for an addict. It’s true, after all, that absent a dose, the addict will get very sick! We need a theory of state action that is effective at addressing current crises — even profound crises like COVID and the 2008 financial collapse — while supporting rather than undermining social cohesion and the legitimacy of the state. Universalism is that theory.

In the previous post, I wondered: If we now conceive of racism as systemic and institutional, rather than individual and personal, could we also do the same for love? Universalism is one way of embedding unconditional love in the shape of our institutions. The warmth of our civilization flows to all, not in the form of threadbare assistance to those who prove they “deserve” it, but as benefits that we all share. It’s the contribution to this social foundation that we’d means-test, through the tax system. One can imagine, neoliberally, that taxation to support a generous universal foundation would so blunt incentives to produce that we’d collapse to destitution. Have you noticed, neoliberally, that we are already in collapse due to precarity, social resentment, incapacity to manage conflicts and coordinate through government? Is it really inadequate incentives to succeed that are holding back our advances, technological and otherwise, or the fact foregoing a career at McKinsey or Google to do something interesting is just too risky, given how precariously we all live, how far there is to fall? Universal benefits are popular because they are actually good, in both a technocratic and ethical sense. They are opposed by incumbent interests not because they would fail, but because they might succeed.

I’ll let Atrios have the last word:

[T]hey would prefer plunging the economy into a deeper recession and the misery of millions of people on the off chance people might realize government is actually capable of doing things for them.

1303 words

The people whom it is easiest for me to love are people who love words. When I am in company, I live for conversation. When I am alone, I read. When I am not reading, not working, when I am not “consuming” media or running errands, my mind is at play. My play is word play.

Perhaps it is yours as well, dear reader. There’s selection bias here. Readers of words like these, impractical superfluous words, are a different population than readers of memoranda, court orders, and instruction manuals. If you are reading these words, you probably read novels. Have you noticed how in novels, at a level of generality that ridiculously broad, the protagonists, the good guys, the heroines and heroes, are disproportionately bookish? We love the word, we readers and writers, and through the word we recognize one another, we love one another. We construct our selves, our souls, from words we mouth incorporeally, and our conversations are sex, incorporeally. Arguments if we like it rough.

The word is a sign, its nature, taught Saussure, arbitrary and differential. So too is human love. It is often arbitrary, whom we love, a matter of chance and circumstance and accidents of birth. Love is differential. The set of those to whom we give our hearts tacitly defines a complement, those to whom we do not.

We, you and I, readers and writers, we lovers of the word and so lovers of each other, fancy ourselves cosmopolitan. We read from many cultures, perhaps in many languages. Yet reading itself is its own insularity. Culture is an insularity. To the theater-goer, the kind of person unlikely to come to a play is visible only as refracted through the words of a playwright, who is likely to be the kind of person likely to come to a play. On television, in the new social media cliché, God herself is “the writers”. Those of us who love to read and write may read and write as widely as we wish. We read only writers, and if our writing is broadcast into “democratic media” we become exhibitionists to rather than lovers of those outside our circle.

As children many of us were bullied. We did well at school. As adults, most of us like most of everyone lead precarious lives. But those who do not, those who do well, are drawn disproportionately from our ranks.

We constitute a tribe of insular cosmopolitans, incestuous exhibitionists. And from the outside it might seem like we are running things. It is hard not to read what I’m writing as a dog-whistle for Jews, but I think that’s backwards. Jews are a metonym for us, not the other way around. If you know what a metonym is, you are probably one of us. No need to wear a yarmulke, or have Ashkenazi roots. Few of us do.

We people of the word, people of the book, seem to run things not because we have some unified plot to rule. Argument is our sex, we mostly do like it rough. Those who rule are drawn from our ranks because it turns out magic is real and spells are formed of words and symbols. Whether in science, business, or social affairs, a facility with words and symbols imparts capacity to predict, coordinate, organize, and inspire. Most of us do not succeed, in the way our social hierarchies define success, because the word is its own distraction. Reading and writing and praying our selves into existence all day long divert one from the bottom line. But at our margins there are those who are distractible from distraction, within whom the word and practical affairs and ambition do not crowd one another out. These people do very well. We are simultaneously a class of losers and leaders, and that is our reputation, well enough deserved.

But the effect of all of this is we are perceived by others as a ruling class, a ruling caste. On average, we are, but only in the way that the average person in a room that includes Jeff Bezos is a billionaire. It is an irony that the accusations of betrayal that beset us are often framed in terms of cosmopolitanism, when our failures are of insularity. We ourselves are mostly losers, but we set ourselves apart and on the same side of a great divide with the industrialists and mandarins who do in fact organize and coordinate and reap disproportionately the benefits of an increasingly enclosed world. We do this not out of malice, or prejudice, but gentle affinity. People who love words love people who love words. We find one another, and relegate to everyone else the role of anthropological subject, to be examined at a safe distance from behind a page. The putative (much overrated) accuracy of our “social science” is a very far cry from love. Our journalists interview and our novelists invent, with results (of whose “empathy” our reviewers gush) that cannot help but be projection, tinged with grievance and condescension.

We have, amongst ourselves, a “What’s The Matter With Kansas” problem. We love ourselves too much, too indiscriminately. Most of us share material interests more with the lumpenproletariat than we do with the sliver of us that reaps outsize gains. But we share the same academy with the TED celebrities. We join them on panels, at forums, in casual conversations. Our journals and nonprofits, our “activism” and “organizing”, are funded by and often led by them. We read Barack Obama’s new memoir. He is plainly one of us, thoughtful, self-critical, erudite, eloquent. To read is to love. If we are “on the left” we may denounce these beautiful winners, but our loyalties are divided. We bask in reflected honor, we enjoy a warmth, emotional and sometimes material, from an institutional and social closeness that participation in the conversation can bring. They are of us and we take pride sometimes even in the achievements of people whom our politics would argue are crushing us.

It is fashionable, and correctly so, to talk about systemic or structural or institutional racism. Addressing villainous personal bigotry is the easy part. Social problems are, tautologically, social problems, embedded in patterns and practices of behavior, many of which might seem innocuous or even virtuous in isolation.

That people who love words love people who love words seems innocuous or even virtuous. But it is time, I think, to talk about love as systemic or structural or institutional. The social fissure, between people who become coded as “educated professionals” (whatever jobs we do or don’t have) and the great majority who don’t, may derive “naturally” from accidents of affinity. There is no study we can undertake, no book we can write, that will remedy it. But there are institutions that might. We could alter the landscape of material and social life so that we mix more, so that we are not as able or likely to segregate ourselves among ourselves, geographically, occupationally, digitally. Even those of us with overdeveloped insular cortices remain capable of affection beyond ourselves. We look upon ourselves, upon one another, as the civilized people. (We cosmopolitan liberals might resist putting it that way, we’d not want to imply that the people we condescend to are uncivilized.) But when the civilized self-segregate, should they be surprised that among the population they have fled emerges barbarism? We need to love more openly, more promiscuously, more forgivingly. We will fail if we treat this as a matter of personal virtue or obligation. Love is a material and institutional project. Love is downstream from politics.

We have done our part, without intention or malice, to create this world we so lament. It is time for us to do our part to undo it.

May 2021 be a better year for us all.